Private Equity Case Studies in 3,017 Words

Since I was getting approximately 53 emails per day about this one, I decided to make it easier and just tell you everything you need to know about private equity case studies.

Lots of people are going through private equity recruiting this time of year, so let’s take a look at what to expect and how to tackle the case study – a critical part of most buy-side interviews.

Note that these “case studies” are completely different from the “case interviews” you get in management consulting (not that I would even waste space on consultants here, but just to clarify…).

Why?

Although I labeled these “private equity case studies” above, you’ll encounter them in almost every buy-side interview, from mega-funds to tiny 4-person firms to everything in between.

Not all hedge funds do them, but any fund that does some long-term investing (as opposed to effectively day-trading) will usually make you complete some type of case study as part of the interview process.

Sometimes they’re formal and sometimes they’re informal, but they’re always important – if you screw yours up, you probably won’t be moving onto the next round or getting an offer.

So even if you’re a consultant or you’re moving in from a different field altogether, you will still have to complete case studies.

No one ever says, “Oh, well you you didn’t do much modeling so we can just skip that part of the interview.”

Instead, they assume that you know how to do it and then weed out people who don’t.

Even if you are applying to PE firms straight out of undergrad, or you’re applying as an intern, you’re still likely to get case studies – multiple friends who did this had case studies pretty much everywhere.

The only exception here is senior-level hires – but then, if you’re reading this right now you’re probably not interviewing for Partner-level positions…

What?

The case study is designed to answer 1 simple question: “Should we invest in this company?”

The firm could ask you to complete the case study in a couple different ways:

Most Common: You get materials on the company they want you to analyze (financial statements, 5-10 page document describing it, maybe some outside research) and you have anywhere from a few days to a week to complete a short presentation.

Part of the Interview: Some places will make the case study a part of the interview itself – they might give you basic information on the company and then give you 2-3 hours to do your work and present to them immediately afterward. More common at mega-funds.

Just the LBO Model: This is less common, but they could also give you 30 minutes to create a “simple” LBO model of a company just to verify that you actually know how to do this.

This article will focus mostly on #1 and #2, since #3 is just a sub-set of those.

Hedge funds are less “formal” than PE firms if they ask you to do a case study at all, and in other fields like corporate development and venture capital you’ll either have more of an informal case study, or you won’t do one at all.

Case Study Ingredients

At the bare minimum, you’ll usually get some type of Word document describing the company in question (called an “Information Memorandum” (IM) or “Offering Memorandum” (OM) or “Executive Summary” in banker terminology).

It might be short (10 pages or less) or it might be quite long – dozens or even 100+ pages. If you’re analyzing a public company, they might just point you to the 10-K or 10-Q (annual report and quarterly report, respectively) instead.

It’s rare to get extremely detailed operating models because you don’t have time to go into pages of detail. Outside research is similarly rare.

The firm usually won’t give you guidance on how to value the company or how to build your models, but that’s for an entirely different reason: they want you to figure it out.

Structure: Simple FTW!

Simplicity is the most important word for your case study.

If they don’t give you a structure to adhere to, I would recommend the following:

1 Summary slide in the beginning.

2-3 Qualitative slides discussing the market, management, and anything unique to the deal.

3-4 Quantitative slides that go into the appropriate valuation, and what kind of returns the firm can expect.

Yes, for actual portfolio companies (in PE) and clients (in banking) your presentations and models will be more complex, but you do those over months and years.

Slide Structure

Have a maximum of 3 or 4 (large) bullet points on each slide – and if you’re showing graphs or the output of valuations or your LBO model, don’t squeeze 25 different things on one page. Keep it to a max of 3-4 different charts or graphs per slide (roughly 1 per quadrant) or it gets very confusing.

Rather than trying to fit a huge mass of text on each slide – as you might do in pitch books – you want to focus on the main points only because you’re going to present live to your interviewer(s) later on.

Put too much text in your presentation and the interviewers will focus on the text rather than what you’re saying.

Summary Slide

Do the following in 3-4 major bullets:

Do we invest in this company? Yes or no – no “maybes” or “conditional upon” statements – they want a decision one way or the other.

Support your decision with major points: Give 1-2 bullets to support your decision, focusing on the major items – not tiny details that don’t matter.

Hedge your decision by pointing out the key investment risk: No investment is perfect, and everything has risks associated with it – point out the major 1 or 2 risks that are apparent with your company right here.

This may sound stupid to you, but a Partner at a middle market PE firm once told me that over half the interviewees failed to make a decision one way or another in their case studies.

Current public market valuation under-values company by approximately 10%, creating solid investment opportunity

Key investment risk is strength of US economy and risk of consumer spending falling

Yes, I realize this deal was a great example of an investment gone horribly wrong once the casino industry imploded, but these points are for illustrative purposes.

Qualitative Slides

These slides are highly dependent on the company you’re analyzing – at a minimum, though, you need to think about the following:

Market: Is this an industry that’s growing? Will it grow more quickly/slowly in future years? Do you see positive or negative trends due to technology / regulations / competitors? Where does this company stand next to the competition?

Competition: How does this company fare against its competitors? Does it have some type of unique advantage that others can’t replicate? What about the barriers to entry?

Growth Opportunities: How quickly can the company grow in the future? Is there any “low hanging fruit” or room to easily win more customers / revenue in the future? Do you expect it to grow faster or slower than the market as a whole?

Risks: Every investment carries with it risks – are the key risks here related to the market, or the economy as a whole? To the competition? To government regulations? And is there any way of mitigating these risks?

Other: If there’s anything especially notable about the management team, the products/services or other items unique to the deal, you can mention them as well – but stay away from saying, “The CEO is great!” because you have no way of knowing that.

Focus on the first 4 items because those are the main ones that impact your investment decision.

Quantitative Slides

These slides should address valuation and expected returns.

The biggest mistake you can make is going into an unnecessary level of detail by doing any of the following:

Spending hours debating which pub comps and transaction comps you should be using.

Creating a detailed LBO model that handles 500 different cases and also adjusts perfectly for items that no one cares about.

No one is going to look at how you came up with these numbers, so keep it simple and use Capital IQ (or whatever information service you use) to gather the data automatically.

A sample structure for this section might look like:

Valuation Overview: How much is this company worth, and what methodologies are you basing it on? This is where your “football field” chart goes.

Valuation Detail: Here you can show the pub comps and transaction comps you picked, along with your DCF output. Depending on the company and situation, you may be using different or additional methodologies as well – this is most common for real estate, energy, and financial services.

LBO Model Output: Don’t go into a ton of detail here – just show your assumptions and the output of the model under a range of sensitivities (even though this is a simplified model, it’s still important to show sensitivity tables on the IRR and it takes 2 seconds to add).

Depending on how much output you have, these sections could comprise anywhere between 3 and 4 slides. Resist the temptation to write 20 slide chock-full of numbers – this isn’t banking.

Valuation

Do a simple Capital IQ search for companies in the same industry with revenue or market caps in the same range, and if you know anyone at the relevant industry group at your firm, request that information from them.

If you’re not in banking and/or you don’t have Capital IQ access, this section will be more difficult to complete – try to get a friend who has access to send you login information, or get the information directly from friends with access.

And if you absolutely can’t get access or you are under extreme time pressure (it’s an “on the spot” case study), you can skip parts of this and just show a DCF (or DDM if it’s a financial company, etc.) to support your valuation.

You definitely need to give some indication of value here – but if you don’t have or can’t get access to all the information you need, focus on what you can do (e.g. DCF in place of public/transaction comps).

Sources & Uses – How much debt / equity you’re using, and then how much of that is being spent on acquiring the company vs. transaction fees / paying off debt.

Simple Income Statement / Cash Flow Statement / Debt Schedule – The Balance Sheet is not necessary if you think about it, so I would only include it if they specifically ask for it, or you need it because of an unusual investment scenario. Excluding the Balance Sheet saves you time without detracting much from your model.

Returns & Sensitivities – Do a simple IRR calculation and show IRR over a range of purchase/exit multiples and your other assumptions.

You may have to stray from this if your company has NOLs (Net Operating Losses) and anything unusual that needs to be taken into account (minority interests, other unusual investments, pending divestitures etc.) but you should still focus on what you need rather than what looks cool.

This should not be much different from your Summary Slide in the beginning – just re-state what you had there in different words, and perhaps add more detail.

Instead of just making a yes/no investment decision, for example, you can also specify here at what price level you’d invest, either in dollars per share (public companies) or as a lump sum (private companies / divestitures).

You may also want to go into more detail on what can be done to mitigate the risks you brought up here or on the Intro slide.

Decision-Making

Reading all this, you might be wondering, “But wait – how do I actually make an investment decision?”

And that tells you exactly why investors don’t have it easy: it’s never a clear-cut decision. But remember that your actual yes/no decision doesn’t really matter that much – what matter is how you back it up and support it with your work.

Making investment decision goes way beyond the scope of this article, but here are a few guidelines:

The numbers matter, but mostly for initially testing whether or not something could work – if a company is already over-valued by 50%, for example, chances are it will be a bad investment. If your LBO model never shows the IRR going above 10% even with crazily optimistic assumptions, it’s also a bad idea.

Your decision should ultimately come down to qualitative factors, with the valuation and returns you calculated to be used as support.

Your support shouldn’t be “We should invest in this company because it’s under-valued by 10%.”

You want to say, “We should invest in this company because it’s set to grow faster than the overall market, it’s light-years ahead of its competition, and on top of all that we could get a 20% IRR even with very conservative assumptions.”

So don’t get preoccupied with minutiae – focus on your investment thesis and the major reasons you’re recommending or not recommending an investment.

Factors Outside the Slides

Your presentation style, the number of people watching, and how much time you’re given can also come into play, but it’s very difficult to generalize here because each firm does it differently.

You might present to just 1 interviewer, or it might be to all Partners at the firm – in which case you better know your stuff.

A lot of this comes down to public speaking, which again is beyond the scope of this article – but here are a few guidelines I’ve followed when giving speeches and making presentations:

Have some notes with you, but don’t write down word-for-word what you’re going to say.

Speak twice as slowly as you normally would and look at different people in your “audience” every few seconds (only applicable if you are presenting to multiple people, of course).

Always practice beforehand, even if you only have 15 minutes – just practice running through it in front of the mirror and going through all your points, without reading anything word-for-word.

How Much It Matters

The case study certainly weighs in heavily, though it’s not the only factor in private equity interviews – top firms usually have many, many rounds of interviews, and even smaller and middle-market firms can take weeks or months to make a decision, simply because they can afford to be very selective about who they hire.

I would compare a case study in private equity interviews to technical questions in investment banking interviews: doing a poor job can kill your chances, but being a superstar won’t necessarily help you. Case studies are more of a way to weed out people than anything else.

As with any other type of interview, your success comes down to “fit” questions and your “story” after you’ve cleared the technical hurdles – if everyone likes you and is confident you’d do well, you have a good shot at getting an offer.

Most candidates have terrible “stories” and also have no idea why they actually want to do anything in life – from getting into investment banking or consulting to moving into private equity.

The last thing a PE firm wants to see is yet another person who’s trying to get in because they heard it was cool, because all their friends were doing it, or because they want to make a lot of money and have no idea how else to do it.

So if you make sure your “story” is solid, come across as a likable person, and do your case study reasonably well, you stand a good shot at getting an offer no matter how “competitive” it is.

No, I Don’t Have Any Sample Case Studies and I Don’t Have a Guide (Yet)

Before anyone asks: no, I don’t have any sample case studies because I lost all my documents from banking.

If you want to “practice,” I would suggest getting a CIM or OM on a company you don’t know well and running through the exercise above – or just pick a random public company and go through their filings.

I receive many questions on a PE interview guide, but again I don’t have anything at the moment – PE interviews are less about specific technical questions (except at mega-funds) and more about your deal / client experience and the case study. If I were to create such a guide, it would be mostly example-based and next year is the earliest it would be out.

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

Comments

This is a very helpful article. Thank you. I have a 3rd round PE interview next week with a modeling test and writing sample. Can I expect to be able to use any outside resources? Do you think they will give me a template or will I be working from scratch? I was told the interview will be 3-4 hours and I need to bring a laptop.

Hey thanks for posting this article, it has guided me in the right direction! I have a 2nd round middle market PE interview coming up very soon. Its going to deal with portfolio allocation, so I really won’t get any LBO type questions. My background is in consulting and I mentioned in round 1 with the MD of the group that my modeling skills are not super, but I can put something together. He told me there will be a case on allocation and to brush up on my statistics.

I’m really not sure what to do here. I have been watching videos on modeling variance, co variance, efficient frontier, beta, etc. Can you give me some advice to help me to stop freaking out. I want to have a good shot at this position. Its a beast of a second round 5.5 hours…

This article was written a long time ago, but there is a small chance that we may still release a PE guide next year (2015). I say “small” because 90% of the guide is already covered by our modeling courses, bonus case studies, and IB interview guide…. so I don’t feel it would be particularly useful.

I’m currently working in transaction advisory in one of the Big4s in India and recently got a call from a direct secondary fund in Hong Kong for an Analyst role. Two questions primarily:

1. I’m at a loss to understand the timelines. After a first round telephonic in the second week of Feb they said they’re gonna send a case study over the weekend and then there’ll be partner round(s). It’s been six weekends and every couple of weeks I do follow up over mail / call. Last time the guy mentioned that he is being a little lax and will surely have it sent the following weekend. And two weekends have passed after that.

Is this normal turnaround time for a small boutique – ~ $500m – 6-7 member team? I feel there is a line between showing interest and following-up and annoying, which I certainly don’t want to.

2. Are direct secondaries on a more or less equal footing to a regular PE fund, since the investment process / the work is pretty much the same (as opposed to say fund-of-funds)?

Would appreciate your thoughts. And great articles as usual. Have helped a lot truly.

Thanks for your support!
1. Yes it happens more often than you think especially because it is a boutique and they (1) may not have the resources to interview/sort out the hiring process during this time, (2) may have temporarily put hiring on hold, (3) have been too busy to focus on the hiring process, (4) one member didn’t communicate to the team regarding your application/contact. While it is reasonable to assume that the boutique may have lost interest in your application for whatever reason I suggested earlier (hiring needs, staff turnover, etc), I would suggest you to follow up with the firm again if you haven’t already done so last week to show your interest in the firm to avoid miscommunication/assumptions on your end.
2. I’d agree with you though it also depends on the fund.

Thanks for the great post. I’ve got a marathon day of PE interviews approaching and it’s for secondaries.
The case study is only 1 hour long. What do you think I should focus on in my preparation & what kind of formulas/equations should I cover (secondaries direct investing but also fund of funds- so basically picking managers). I have been in direct investing so I have no clue how different this will look?!
Please help! :) K

Thanks for the great post. I’ve got a marathon day of PE interviews approaching and it’s for secondaries.
The case study is only 1 hour long. What do you think I should focus on in my preparation & what kind of formulas/equations should I cover (secondaries direct investing but also fund of funds- so basically picking managers). I have been in direct investing so I have no clue how different this will look?!
Please help!
:) k

I have a presentation/case study for my Equity Research interview on thu. I however only get 45 min of prep time to prepare the presentation. I was wondering what are the most crucial points that I have to look out for

1) Read up on the markets and be able to talk about a recent trend.
2) In preparation for the interview, I’d suggest you to pick a stock you would buy and be able to talk in-depth about it (make a pitch with prep time of 45 minutes). Pls address why you like it and why you think the stock will appreciate (in terms of its valuation, position in industry, industry growth, company specific growth, etc)
3) Outside of the case study, be able to talk about why you want ER and how you can add value (i.e. your passion in picking stocks, your view on the markets, your view on various investment philosophies, which sector you are more interested and why, and how your analytical and sales skills can add value)

I am in my sophomore year of high school ( year 10 in Australia) and want to get into investment banking. I have started networking but I’m wondering if you could give me an overview of all the technical questions, pitching, case study etc information you would be expected to know for a summer internship. I am really interested, I just want an idea of where I should focus my interest.

I have a PE specific question (about Blackstone), where I throught that you might know more about.

Typically if you move over to PE after your 2-year BB analyst stint, youn would become a pre-MBA associate (at least at the likes of KKR, Carlyle, Apax). So the typcial career path would like like the following (pls correct me if I am wrong)

This may be a silly question but if you are given a case study on the spot (in a private equity interview), are you allowed to use a calculator? Should you just assume no? Also, are there some standard assumptions to make that will make the mental math easier? For example, calculating returns on LBO.

You can usually use a calculator if it’s a more involved case study, but you should be able to approximate returns in your head based on the rules of thumb (e.g. if you know 3-year and 5-year IRRs for doubling and tripling your money).

I realize this post is for PE, but if an IB would require a short case study presentation of any deal of our own choice, what type of deal would you recommend choosing? (eg. made by the IB) And what other recommendations would you make on how to go about it?

But is it even worth to work as an assistant financial controller if your long term goal is to be an investor? I guess my question is , how probable is it to go from middle to front office in PE? In the BB i would be joining the IBD department in M&A, ECM or leveraged finance.

Thanks for the great information posted on this site. Helped me out a lot!
I m currently in a dillema and thought your experience could help me out.
My situation: Graduate from LSE looking to work in Finance . I haven’t been networking enough and have applied online for IB jobs( i know, i know :)) Have been invited for an assessment centre for a Bulge Bracket firm last friday , and still waiting for their response. My long term goal is to work in PE. Have rceived an offer to intern for a 1 year in a PE in Paris but as an assisstant Financial controller. Some people told me that I will learn a lot and could possibly land a intern position as an investor afterwards while other say it is worthless for me if I want to be a professional Investor later on. what do you think? I also imagine that I should accept the Bulge Bracket offer over the PE internship offer ? Thank you very much

Depends on what you will be doing at the BB. You haven’t rec’d the offer from the BB yet have you? If you haven’t, I’d hold on to the PE offer for now – you can tell them that you need some more time before you respond.

SO, I am doing a Private Equity LBO case study and I do have access to capital IQ.

I’m trying to figure out how to pick an appropriate purchase multiple for our company. What I’ve been told is that I should look for other similar LBOs in the industry and see what purchase multiples they have used.

Unfortunately I have had an extremely hard time finding that information. How can I find the EBITDA multiples that were used in other LBOs???

I have on the analysis one will present in the Qualitative Slides (Market, Competition, Growth Opportunities, Risks, Mgmt, …): on what will you base your analysis during a case study? I mean, you don’t have access to i-net to search the net for competitors, market-trends, … do you?, and I’m guessing most of this qualitative stuff will not deductable from the info memorandum or the 10-K, right? Should you “just” make some (realistic) assumptions and stick with them along your presentation, or is there another way how to tackle this?

Should I be looking at this differently if I’m doing the case study for a hedge fund? I know that not showing the LBO component is a no-brainer, but I’m not 100% sure if the flow / focus of the presentation should be any different.

Not really, for HFs the structure can be similar. And you might even make an argument for including the LBO depending on the type of fund it is. But in general they will focus more on valuation and whether or not it’s a good long/short idea depending on the numbers.

First of all thank you so much for all those EXTREMELY helpful emails you have been sending out !!

I have a few questions,

From what I have read here, it seems very likely that PE firms love to recruit from IBD analyst right? since the work is very similar. But I also heard that PE actually loves to recruit wealth management people than IBD? Because wealth management is harder to get in than IBD, that’s why a lot of people are trying to get in IBD than wealth management? Because I am working for a wealth management firm right now, so I have this teeny tiny hope that the above might be true…..

Also, from what I have read here, it seams impossible for an undergraduate student, who has no experience in IBD, will get a PE offer, right?

I have an interview next week and will also have a case study. Specifically, I need to dissect and analyze an asset(whether that be equities, bonds, currencies, derivatives…). I am wondering what to expect to answer this kind of type interviews and how to prepare.

It’s very similar to what is shown here… is it a good investment? Why or why not? What are the key positives and negatives, and how can you overcome the negatives? And then show some numbers to back up your calculations. I am not an expert on bonds/currencies/derivatives so don’t know the specific math you would use there, but the basic idea is the same as in the tutorial above.

Hello
I am facing a case study very soon.
I want to thank you for your 3017 words. Very informative
But allow me to ask you the difference between a “Executive Summary” slide at the beginning of the presentation and an “investment decision” slide at the end.
I really dont understand how to make a clear cut between them in terms of the context of those slides

The lifestyle on the buyside (specifically PE vs. IB) is generally better because of the type of work required and the absence of facetime hours. Bankers are constantly on call and must be responsive to their clients. PE guys must be responsive to the deliverables required by the particular part of the deal cycle (and of course to their LPs).

My experience has been PE work is done on a deliverables basis (update models, draft presentations, etc) vs. IB is done a pure volume of hours basis as bankers have a lot of downtime while waiting for comments from VPs/MDs and clients.

Buyside work is generally more intellectually stimulating, complex and diverse.

It also depends what kind of firm you’re at… go to KKR or Blackstone and you’ll be pulling banker hours all over again.

There’s some truth to PE work being “better” but I think it’s a stretch to call anything in finance “intellectually stimulating” – once you’ve done a few deals, the learning curve flattens out and it becomes routine.

I spent 6 months in an internship at the Italian office of a bulge bracket bank;even though they would, they weren’t able to make me an offer for a full-time position, because of the well-known market conditions.
My staffer told me I was an overperformer, and all the people I worked with had a very well opinion of me; for this reason he told me they will act as “sponsors” with the companies I will apply to.

So:
– What can I expect from this “sponsorship”? How shall I leverage it?
– Considered that my GPA is a lot below average, will this fact penalize my applications to investment banks/PE?
– Do banks/PE funds see an internship in Italy as less prestigious than one in the UK/US? How difficult is to obtain a Visa status to work in the US?
– How many (approx) analysts does Blackstone hire in its M&A advisory group? And in its PE business?
– What about GS merchant banking/PE? Do you think it’s more difficult to join this division than the IBD?

Hey, I have a friend who used to be in private equity and this is his story. He worked in Mumbai as a Private Equity associate and was doing very well in the good old days. He moved up the ranks until he was making the investment decisions. However, the market soon went in a downward spiral and he felt more pressured than ever to make good investments. However, one of his deals went wrong. Fortunately, the firm decided to give him a second chance but he screwed that up as well. And because the world of private equity is so small, everyone heard about his bad reputation and now that field is completely closed off because no one is willing to hire him. Is it very easy to screw up as badly as he did and is it common? Personally, I have plans to stay in private equity for as long as I can. Do you think this is feasible or will I just eventually end up like him?

Interesting question – it’s very possible and that is a big risk even in banking if you happen to screw up. I wouldn’t say the chances are “good” but you could easily get locked out of any of these fields if you mess up – the higher the potential reward, the higher the risk.

Once associates reach the partner level, do the hours become a lot better and do they travel a lot? How many years will it take an associate to get to the partner level. If the hours don’t get better, what are common exit oppurtunities for them so that they can have a better work-life balance? (besides starting their own fund)

Partners generally still work at least 60 hours a week and travel often to check on investments, etc.

Usually takes 5-10 years to get there depending on the fund and whether or not they promote directly.

Honestly if you want a work-life balance, you can’t be in any type of front-office finance role – you’re always going to have more work than life. I imagine if you got bored you could just move to a normal company though.

Keep in mind, though, that even at normal companies as you move up the ladder the hours get longer.

The ultimate solution, of course, being to start a website for teaching people about finance so you don’t have to do that much work and can do everything remotely. :)

Hey so I’ve never actually worked in IB or PE, but I’ve heard that once you switch into the buy-side your life improves dramatically. Gorgeous women will rip your suit off of you as you walk down the streets, super models will ask for you number at every corner,and cab drivers will treat you like a king. So how do you handle it all?

I’m assuming that’s a joke. You work 100 hours per week at the top funds, and it’s no better than banking. At some smaller firms you might be better off than in banking, but no one even knows what private equity is in the outside world so models certainly don’t care about it.

I never read the news (waste of time) so I haven’t read anything about earnings, but I’m assuming MS simply took less risk than JPM / Goldman and therefore did not profit as much.

Let’s be realistic here. There are a lot of hot models in NYC. These girls want guys of high status, wealth, etc. They know they can find them in the meatpacking district clubs like Marquee, Cain, and Bungalow 8. Being a banker or PE/HF guy can put you in the running for these girls, assuming you’re decently good looking already.

I feel like I’ll be able to pull some if I’m a banker next year, with the few nights I’m actually able to go out.

interesting thread, have a few PE case studies from my school days somewhere around. would be interested to look at your models, particularly mergers and acquisition, valuation is of course also interesting.
you can find me on linkedin
michael iliste v roop

Your site really has offered me a lot of useful information. Am just trying to get started on PE and already one firm was interested in offering me an internship. Problem is my modelling background is on very shaky ground. If you wouldn’t mind could you forward LBO models.

A question a bit off topic but recently when Morgan Stanley released its quarterly earnings, their CFO gave an interview and pointed out that the traders didn’t take as much risk as the traders did in Goldman Sachs. Why do you think this was the case? What did goldman spot that morgan didn’t? I’m a bit perplexed that Morgan Stanley didn’t match Goldman’s earnings. Care to explain? Thanks.

They simply chose to be more cautious than GS because they were afraid of another financial meltdown similar to Sep. 2008 – whereas Goldman reasoned that things were improving and they could take more risk now, especially with TARP being repaid and all.

Great Article! Case studies are all we do in my private equity class. Our professor grades us similarly to how the interviewers might, he doesn’t care what our opinion is (yes, no, or maybe) all he wants us to have is a solid reasoning behind our opinion.

I have a bunch of my case studies from Harvard Business School, they are they best because they give you all the information you need to form an opinion, but don’t give you the answer so you can figure it out by yourself.

I don’t think I can post them here due to copyright reasons. You can buy them online from the Harvard publishing website (I think they are $7 a case).

Thanks for the tip. Yeah, the HBS ones are good though I think they’re a bit different from the ones you typically get in PE interviews, probably the closest you can get without being in the industry though.

Honestly I don’t think HBS has “case studies” in the sense of what was discussed here – the closest you can find are discussions of actual PE deals, which are not bad to review but not really the same… example right here: